Dozens of investors owed millions of dollars by the company behind The Falls Resort in Chilliwack may never see a penny now that a buyer has been found who will pay a fraction of what is owed for the struggling development.
With $75 million in debt, Blackburn Developments was granted creditor protection in B.C. Supreme Court earlier this year.
PricewaterhouseCoopers (PWC) was appointed as monitor and for the past few months has been overseeing a restructuring.
Last Thursday, a $15-million bid to purchase The Falls by Vancouver-based developer Pinnacle International Group was approved by the court.
Pinnacle has developed hotels and residences in Toronto, Vancouver, Richmond, North Vancouver, Whistler and San Diego.
The Falls' vice-president of operations Mike Erickson did not respond to the Times before press time.
In the sixth report filed to the court on Sept. 29 by PWC, Pinnacle was identified as the preferred bidder for the property, including the golf course. Among other offers received, there was very little interest in the golf course.
"The offer presented by Pinnacle is the most favourable and will provide the highest return to all creditors," PWC reported.
Under the transaction, unsecured creditors will receive funds whereas they would receive nothing in the case of a bankruptcy, receivership or foreclosure.
Landus Development Group is the single largest creditor, having claims of more than $23 million.
But even if Landus is first in line, it appears the company will still be short millions of dollars.
No one from PWC or Pinnacle returned calls about the purchase agreement.
While PWC worked for months on finding a purchaser, in its Sept. 23 filing it was reported that Falls founder Rick Wellsby and chairman Robert Wilson had been also looking for potential buyers in a way that "may have negatively impacted or unduly complicated the sale process."
As a result, PWC asked the court to direct the two to "immediately discontinue any further efforts to restructure the company, including by communicating with stakeholders and prospective purchasers except as expressly authorized by the Monitor [PWC]."
As of last Thursday, PWC terminated all annual golf passes and golf memberships at The Falls as part of the restructuring process.
Earlier this year, those who had paid 15 per cent in advance for weddings were told they would lose that money. Weddings continue to be hosted at The Falls. PWC said hosting prepaid weddings has not caused the company to incur financial losses so they were allowed to continue.